Killing energy plan to hike prices: Labor

Power prices will rise by hundreds of dollars as a direct result of the federal government scrapping its energy plan, the Labor opposition has warned.

But Energy Minister Angus Taylor says dropping power prices is the government's priority and sought to promote doubt in Labor's own plans.

The government claimed its flagship National Energy Guarantee would help drive electricity prices down by $550, with at least $150 of this saving expected to flow directly from the policy.

But Prime Minister Scott Morrison has disowned the "dead and buried" plan, after it proved unpalatable to some of his conservative colleagues.

He will abandon most of the policy in a partyroom meeting on Tuesday, but wants to keep the reliability guarantee, default prices and measures to add new generation.

Finance Minister Mathias Cormann is among those who have suggested there was no prospect of getting the original plan through parliament.

Labor energy spokesman Mark Butler expects the failure to implement the plan will drive up prices by almost $300 for Australian households because of a complete lack of investor certainty or investment.

Mr Butler said Labor had been open to working with the government on energy policy for at least two or three years, but Mr Abbott and a group of "right wing ideologues" within the coalition had sabotaged their efforts.

But Mr Taylor said there have already been power reductions across the board from July in southeast Queensland, New South Wales and South Australia, though there remains work to be done.

"We are not afraid to use a big stick on big energy companies if that's what's required. We're not afraid to do it," he told parliament.

The energy minister said Labor's targets for 50 per cent renewable energy generation and a 45 per cent reduction in emissions would only mean more subsidies and higher power prices.

Business groups are eager to see a replacement for the NEG.

Both the Australian Chamber of Commerce and Industry and Ai Group have stressed the importance of emissions policy and investment certainty.

"Without the emissions component, to reduce uncertainty, its costs may be higher and state agreement may be harder to achieve," Ai Group chief executive Innes Willox told AAP.